Chancellor offers his friends in the north money and power, if cities opt for elected mayor

Chancellor George Osborne re-ignited the localism debate today when he offered the great cities of northern England new money, infrastructure, and transport links, but made it clear that the deal would be dependent on cities having elected mayors.

Speaking in Manchester, setting out a “pathway to a northern powerhouse”, Mr Osborne said plans for a major transfer of powers and budgets from Whitehall to northern cities would be a central feature of his Autumn Statement.

By bringing together cities such as Manchester, Liverpool, Leeds, Sheffield and Newcastle it would be possible to create a region “with the size, the population, the political and economic clout, to be as strong as any global city”, he insisted.

He promised to give details of a new model of city government in November.

The Chancellor’s move, which has gathered pace over the summer, raises questions about the ability of West Midlands councils to respond to the offer on the table. Birmingham has twice rejected the idea of an elected mayor, while attempts to edge towards a combined authority representing Birmingham and the Black Country appear to have stalled.

The Government appears to be making it increasingly clear that future local growth fund deals and investment packages will be dependent on cities and city regions joining together through elected mayors or combined authorities.

Mr Osborne told his audience of local council leaders in Manchester: “Today I give you this personal commitment.

“Work with me over the coming months and together we will make a reality of the plan I’ve set out for the Northern Powerhouse.

“I’m ready to commit new money, new infrastructure, new transport and new science. And real new civic power too.

“I propose to set out ideas for a major transfer of powers and budgets to cities in the north, who want to move to a new model of city government.

“I know it’s controversial with some, and the local politics isn’t always easy – but almost every major global city has a single mayor, and it’s the view of many different people who’ve looked at our cities here and say it’s time we did the same.

“Before deciding in advance how to respond, wait to see what I am offering in return.

“And wait to see how we will build on the work our Cities and Universities minister, Greg Clark, now sitting around the Cabinet table, has done with all of you on city deals and growth deals.

“We will not disappoint.”

Mr Osborne said he was adding more detail to the northern powerhouse speech that he delivered earlier in the year and added that response to his proposals from council leaders in the north had been encouraging.

He added: “If we can bring our northern cities closer together – not physically, or in some artificial political construct – but by providing modern transport connections, supporting great science and our universities here, giving more power and control to civic government; then we can create a northern powerhouse with the size, the population, the political and economic clout, to be as strong as any global city.

“The response to my challenge has been far more positive and encouraging than I dared hope. It chimed with the thinking you were already doing.

“What I find exciting, very exciting, about this moment is that there is the prospect of a real consensus that this is the way forward.

“Not total agreement on every detail – that would be absurd. But general agreement on the plan ahead.

“It is the plan put forward by Jim O’Neill and his Cities Commission. It is the plan of Michael Heseltine and the work he has done here locally at the Atlantic Gateway, and nationally in his report.

“It is the plan I set out in my speech on the Northern Powerhouse at the Museum of Science and Industry.”